Britvic takes fizz out of £1.5bn AG Barr merger

 
Kasmira Jefford
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ROBINSONS squash maker Britvic has cast fresh doubt over a tie-up with AG Barr after the Competition Commission (CC) provisionally cleared the proposed merger between the two drinks companies.

The watchdog’s preliminary findings, released yesterday, said it did not believe the deal would result in “a substantial lessening” of competition. It will give its final decision in July.

Both sides said they welcomed the news but Britvic’s chairman, Gerald Corbett, added that the Fruit Shoot maker “is in a different place now to last summer” when the deal was agreed, sparking uncertainty over whether it will go ahead.

“The cost savings from merging are less, we are performing better, we have new management and we have a new strategy to deliver good growth internationally as well as in the UK,” said Corbett.

The tie-up between Britvic and Irn Bru-maker AG Barr would create one of Europe’s biggest soft drinks firms with combined revenues of around £1.5bn.

The original proposals would have seen 63 per cent owned by Britvic, with AG Barr owning the remaining 37 per cent, and its chief executive Roger White leading the combined group.

But since then Simon Litherland, who replaced Paul Moody as chief executive of Britvic, has unveiled a new strategy and £30m of annual cost savings to bolster its position as a standalone firm.

Investec analysts said: “It is possible the team want to go it alone, although this could also be seen as an attempt to set the debate around valuation.”